Municipal Energy Transition“Between grid monopoly and the electricity market we need active distribution grids!”

Photovoltaics and solar thermal energy, wind energy, geothermal energy or biomass: In rural areas, there is enough space for a whole potpourri of renewable energies. That’s why committed municipalities often choose the path of citizen participation and are thus more agile than public utilities and companies. However, current regulations make it difficult for such energy communities. We spoke to Professor Albert Moser from RWTH Aachen University in this regard.

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Politicians, grid operators and utilities are facing enormous tasks for the energy transition. The centralized system is reaching its limits and the importance of distribution grids for feeders is growing. What are the biggest hurdles in Germany from a regulatory perspective?

In a nar­row­er sense, the term reg­u­la­tion refers to the reg­u­la­tion of the nat­ur­al net­work monop­oly. In this way, we want to pre­vent grid fees from becom­ing too high and monop­oly returns from being gen­er­at­ed. How­ever, the reg­u­la­to­ry frame­work for the ener­gy tran­si­tion is much broad­er. This also includes pub­lic plan­ning and approval pro­ce­dures. In Ger­many, for exam­ple, these still take far too long—four to five years—for wind tur­bines and are slow­ing down the expan­sion of renew­ables. With regard to local sup­ply, the impor­tant ques­tion of par­tic­i­pa­tion is still insuf­fi­cient­ly clar­i­fied.

How do you involve cit­i­zens and com­mu­ni­ties in the ener­gy tran­si­tion? As an indi­vid­ual house­hold, for exam­ple, one can oper­ate a pho­to­volta­ic sys­tem and first cov­er one’s own needs “behind the meter” and only feed the remain­der into the dis­tri­b­u­tion grid. But what about ener­gy com­mu­ni­ties in which sev­er­al par­tic­i­pants want to join forces for a project across meter bound­aries and con­duct ener­gy shar­ing? Such projects are dif­fi­cult to han­dle under cur­rent reg­u­la­tions, such as those apply­ing to bal­anc­ing or net­work charges. So I would speak less of reg­u­la­to­ry hur­dles and more of reg­u­la­to­ry gaps.

Besides closing these regulatory gaps, what else is needed to build the appropriate infrastructure?

We need active dis­tri­b­u­tion grids because there is a nat­ur­al inter­ac­tion between grid monop­oly and the elec­tric­i­ty mar­ket.

Can you explain that in more detail?

Con­sumers must be able to adapt their behav­ior to the volatile sup­ply. This works via the price. When the sun is shin­ing and the wind is blow­ing, elec­tric­i­ty is cheap. The heat pump then switch­es on and the car is charg­­ed. Con­verse­ly, when there is lit­tle sun and wind, the price of elec­tric­i­ty ris­es and behav­ior changes accord­ing­ly. In addi­tion, grid oper­a­tors need sup­port to avoid over­load­ing the grids. For exam­ple, they must be able to reward those who adjust their con­sump­tion or feed-in when over­loads are immi­nent.

When all par­tic­i­pants are active­ly involved in the mar­ket and in sup­port­ing the net­work oper­a­tors, we talk about active dis­tri­b­u­tion net­works. And these only work with dig­i­ti­za­tion, i.e., fast Inter­net and smart meters for seam­less data col­lec­tion and intel­li­gent con­trol based on this data.

“Unbundling pro­hibits net­work oper­a­tors from oper­at­ing stor­age facil­i­ties. How­ev­er, they can already use third-par­ty stor­age facil­i­ties for a fee.”
Prof. Albert Moser, RWTH Aachen

Can such concepts for active distribution networks be implemented with the current network charge structures?

In prin­ci­ple, con­sump­tion-based charges stand in the way of active par­tic­i­pa­tion in the mar­ket, as they do not reflect actu­al per­for­mance-based net­work usage. The sys­tem we have today is also a result of a lack of smart meters. This main­ly affects res­i­den­tial cus­tomers who have only one meter and no reg­is­tered pow­er meter­ing.
Today, the only basis for billing is the kilo­watt hours con­sumed, regard­less of whether these are called up even­ly over the year at low pow­er or all at once at high pow­er. How­ev­er, the grid must be designed to han­dle the peak loads. In this respect, our cur­rent billing sys­tem is unfair because it is not source-based. The sit­u­a­tion is dif­fer­ent for large con­sumers. They already have a mixed sys­tem con­sist­ing of a capac­i­ty charge and a demand charge.

Apart from smart meters, don’t operators of municipal grids also need the ability to store renewable energy themselves and feed it back in when needed to ensure grid security?

Yes, that would be the clas­sic way to sta­bi­lize the net­works. But today’s reg­u­la­to­ry environment—through so-called unbundling—prohibits net­work oper­a­tors from own­ing and oper­at­ing stor­age facil­i­ties. Grid oper­a­tion is strict­ly sep­a­rat­ed from pow­er gen­er­a­tion and stor­age. How­ev­er, net­work oper­a­tors can use third-par­ty stor­age facil­i­ties for a fee. Var­i­ous con­cepts are being dis­cussed in this regard or are already being imple­ment­ed.

How else can legislators support municipalities in regard to decentralized energy supply?

The delim­i­ta­tion between a reg­u­lat­ed net­work monop­oly and free com­pe­ti­tion in the con­text of unbundling should be inter­pret­ed less strict­ly. For exam­ple, stor­age facil­i­ties or charg­ing sta­tions owned by the net­work oper­a­tors can make per­fect sense in order to pro­mote net­work secu­ri­ty or to achieve the nation­wide deploy­ment of charg­ing sta­tions.

Sim­i­lar­ly, the reg­u­la­to­ry frame­work should more strong­ly enable ener­gy shar­ing among ener­gy com­pa­nies. This pri­mar­i­ly involves sev­er­al peo­ple pro­duc­ing, stor­ing, con­sum­ing and sell­ing ener­gy across prop­er­ty bound­aries. Aus­tria has already enact­ed cor­re­spond­ing reg­u­la­tions in this area which have led to a wave of ener­gy com­mu­ni­ties being found­ed there.